(1)Any officer empowered by the State Government shall issue a show cause notice before taking any action under section 76 or section 77 of the Act against any person who has committed, or reasonably suspected to have committed any offence under the Act and these rules asking him to show cause within a period of fifteen days, why action under the said section 76 or section 77 of the Act, as the case may be, may not be taken against him.(2)Notwithstanding anything contained in sub-rule (1), -(i)any officer empowered by the State Government under section 81 to compound the offence committed under the Act, or reasonably suspected to have committed any offence under the Act or these rules may compound the said offence committed by any person, either before or after the institution of the criminal proceedings under the Act:Provided that the said proposal to compound the offence is accepted by any officer authorised by the State Government.(ii)on an approval of the said proposal by the officer empowered to approve such a proposal referred to above, the officer empowered to compound the offence shall send an intimation in writing in that behalf to that person specifying therein-(a)a sum not exceeding 0.5% of the value of the chit subject to maximum of Rs.50,000/-.(b)the date on or before which the sum shall be paid.
